On Friday, the market began to weigh fears about high inflation as optimism about a potential increase in energy consumption in China faded. The price of Brent crude futures had dropped by 5 cents to $92.33 per barrel. The price of U.S. West Texas Intermediate futures increased by 7 cents to $84.58 per barrel.
“With several key Fed members taking turns at the hawk’s pulpit this week arguing for even higher interest rates, it blunted optimism from China’s reduced quarantine hopes,” Stephen Innes, managing director at SPI Asset Management said in a note. “Everyone is pining for a China-reopening-driven commodity boost, but we are not there yet.”
On Friday, oil prices remained almost unchanged as market participants balanced their excitement about rising energy demand in China with worries about high inflation. WTI was anticipated to decline by 1.3%, while Brent was projected to rise by 0.7% for the week. The U.S. is fighting inflation. Patrick Harker, president of the Federal Reserve Bank of Philadelphia, stated on Thursday that the Federal Reserve is attempting to slow the economy and will maintain hiking its short-term rate target.
China, the biggest importer of crude oil, has adhered to stringent COVID-19 limitations this year, which has negatively impacted business and economic activity and decreased demand for fuel. Prices have recently been boosted by an impending European Union ban on Russian crude and oil products, a reduction in production by OPEC+, which includes Russia, and other factors. Early in October, OPEC+ decided to reduce production by 2 million barrels per day.
